California Tackles Health Care Fraud Amid Larger Nationwide Battle
Federal and state officials have engaged in a heated dispute over alleged health care fraud in California. CMS Administrator Mehmet Oz has publicly accused actors in Los Angeles County of massive hospice and home health billing abuses. His remarks included a claim of about $3.5 billion tied to hospice and home health Medicare billing in Los Angeles.
Federal claims and California’s response
CMS framed some findings as evidence of problematic billing patterns. The agency later clarified not all cited billing was presumed fraudulent pending investigations. Governor Gavin Newsom filed a complaint with the HHS Office for Civil Rights calling the language racially charged.
California Attorney General Rob Bonta said federal leaders were politicizing the fraud issue. Republican state lawmakers also accused Newsom of permitting widespread fraud in a March letter.
Payment actions and national outreach
Oz warned he could pause large federal payments to California if answers fell short. He and Vice President J.D. Vance froze about $260 million in Medicaid payments to Minnesota in late February. Minnesota has since filed suit over that action.
Oz has raised similar allegations about other states. His outreach has named Maine, New York, and, in mid-March, Florida.
State recoveries and national context
Medicare and Medicaid fraud recoveries reached about $3.4 billion in fiscal 2023. States reported roughly $1.4 billion recovered from Medicaid fraud in fiscal 2024. Total Medicaid spending in that year was about $949 billion.
California recovered more than half of criminal recoveries by state anti-fraud units in fiscal 2024. The state accounted for roughly 17 percent of Medicaid enrollees. California ranked fourth in dollars recovered per enrollee, behind D.C., Montana, and Delaware.
Why hospice care is a focus
Hospice use grew more than 8 percent from fiscal 2020 to 2024. About 1.84 million Medicare beneficiaries received hospice care in 2024. That growth has raised oversight concerns.
The Biden administration increased hospice monitoring in 2023 for California, Arizona, Nevada, and Texas. The previous administration added Ohio and Georgia to the list. CMS said it revoked enrollment for 122 hospices in the initial four states as of June.
State investigations and regulatory action
A 2022 state audit found multiple indicators of large-scale hospice fraud in Los Angeles County. A separate investigation found nearly 500 hospices within a three-mile radius, including dozens registered at one Van Nuys address. California revoked over 280 hospice licenses in the past two years and is reviewing another 300.
State officials have filed criminal charges in Monterey County in January. Prosecutors previously pursued cases in Los Angeles and San Bernardino counties. California is also revising emergency hospice regulations that had been due this year.
Legal history and disputed claims of organized crime
CMS statements referenced prosecutions where defendants misused foreign identities to steal nearly $16 million from Medicare. Federal prosecutors in Los Angeles said their public case announcements do not typically note defendants’ national origins. They also said indictments did not allege ongoing foreign-organized crime in recent hospice prosecutions.
Past federal cases from 2010 described an alleged organized crime network tied to billing fraud for unnecessary treatments. Reporting in 2020 documented schemes where non-terminal patients were enrolled in hospice and doctors received kickbacks. Those probes did not emphasize foreign involvement.
Process and next steps
Newsom’s civil rights complaint will first face an authority review at HHS. If accepted, investigators will gather documents and conduct interviews. Observers say outcomes and remedies remain uncertain.
Analysts note that fraud has long affected multiple states and programs. California continues to pursue recoveries while defending against federal allegations.
Filmogaz.com will follow developments as state and federal officials continue investigations. Experts say California is tackling health care fraud while the issue unfolds nationwide.
